Outlook no brighter for Obama's new health plan

Starting over on health care, President Barack Obama knows his chances aren't looking much more promising.

A year after he called for a far-reaching overhaul, Obama unveiled his most detailed plan yet on Monday. Realistically, he's just hoping to win a big enough slice to silence the talk of a failing presidency.

The 10-year, $1 trillion plan, like the current Democratic version in the Senate, would bring health insurance to more than 31 million Americans who now lack it. Government insurance wouldn't be included, a problem for Democratic progressives.

Republicans are skeptical about where the money would come from -- and about Obama's claim that the plan wouldn't raise the federal deficit.

Striking out in one fresh direction that should have wide appeal, Obama would give federal regulators new powers over the insurance industry, a reaction to a rash of double-digit premium hikes that have infuriated policy holders in California and other states.

The plan is supposed to be the starting point for Obama's televised, bipartisan health care summit Thursday -- a new beginning after a year of wrangling and letting Congress take the lead. Yet Republicans were quick to dismiss it as a meld of two Democratic bills the public doesn't want. Democrats, while reaffirming their commitment to major changes, reacted cautiously, mindful that Obama is asking them to stake their political fortunes in the fall elections.

In the end, Americans who have listened to a year of talk about big changes in their health care, may see much smaller changes, if any. The president is likely to have to settle for much less than he wants -- small-bore legislation that would smooth the rough edges of today's system but stop well short of coverage for nearly everyone.

Still, any kind of win on health care would be good for Obama right now. For a president, victory often begets victory, defeat spawns defeat. A modest achievement would allow Obama to move on to other pressing issues, claiming credit for getting something done despite the harshest partisan environment in years.

White House spokesman Dan Pfeiffer called the proposal "an opening bid" for Thursday's summit. "One thing I want to be very clear about is that the president expects and believes the American people deserve an up-or-down vote on health reform," he said.

But privately, a senior White House official sought to lower expectations, saying a solid single is better than striking out swinging for the fences. He spoke on condition of anonymity because of the sensitivity of the issue.

Liberal Rep. Anthony Weiner, D-N.Y., one of the rank-and-file lawmakers who would have to close ranks to pass Obama's proposal, questioned what's left in it for him after the president decided to dump a government insurance option sought by progressives.

"For many of us, the House bill represented a series of difficult compromises, and if the president is going to ask us to compromise further to go toward the Senate, I have to ask who's vote we're getting," Weiner said.

That means the plan is unlikely to pass without an all-out effort by Obama to muster votes from anxious Democrats. "I think all of us are going to have to sell this," said Rep. James Clyburn, D-S.C., the third-ranking Democrat in the House. "The devil is in the details."

If Obama ultimately settles for a pared-down plan, the final bill could look a lot like what Republicans have been calling for over many years. It would include federal funding for high-risk pools that would extend coverage to people denied because of medical problems, a new insurance marketplace for small employers and individuals buying their own policies, as well as tax credits for small businesses.

White House senior adviser David Axelrod said the president had no intention of scaling back his vision -- unless forced. "His goal is to make as much of a good-faith effort as we can possibly muster" for a broad remake, Axelrod said.

When Obama began his health care overhaul effort a year ago, he sought to avoid the problems former President Bill Clinton encountered when he issued Congress a detailed prescription in the 1990s, a plan that failed and contributed to the Democrats' loss of Congress in 1994. Now Obama is being criticized for having been too deferential to lawmakers.

Weeks ago, the president and congressional Democrats seemed on the verge of a historic step -- a long-sought remake of the nation's health care system after a half-century of unsuccessful attempts by scores of politicians. Then Republican Scott Brown stunned Washington with an upset win in the Massachusetts Senate race, denying Democrats their 60-seat majority and reversing any political momentum.

In the new political order, Obama's plan builds on the legislation passed by Senate Democrats on Christmas Eve, while making several changes designed to make it more acceptable to House Democrats.

It would dramatically roll back a Senate tax on high-cost health insurance plans objected to by the House -- and by labor unions. Instead of raising $150 billion over 10 years, the tax would bring in just $30 billion, the administration said. To plug the revenue gap, Obama would raise Medicare payroll taxes on upper-income earners. For the first time, Medicare taxes would be assessed on investment income, not just wages.

In other concessions to the House, the president's proposal would gradually close the coverage gap in Medicare prescription benefits, eliminate a universally scorned Medicaid deal for Nebraska and improve federal subsidies to help many middle-class households afford their insurance premiums under a revamped system.

But many basic questions remained unanswered. For all its fresh detail, the proposal is only 11 pages long. No neutral third party has vouched for the total cost of the bill, or the administration's claim that it would reduce the federal deficit. Also unclear is the extent and impact of new coverage requirements for individuals and businesses.

Congressional Budget Office Director Douglas Elmendorf said Obama's plan was not detailed enough to provide a cost estimate, and even with additional information it could not be ready by Thursday.

The plan would be paid for with a mix of Medicare cuts, tax increases and fees on drug companies and other health industry firms.

With hardly a Democratic vote to spare in Congress, abortion coverage remains a potentially insurmountable political problem. Obama would retain Senate-passed restrictions on federal funding that have been simultaneously decried as a sham by abortion opponents and denounced as draconian by abortion rights supporters.

Like the House and Senate bills, the plan would require most Americans to carry health insurance coverage, with federal subsidies to help many afford the premiums. Insurance companies would be barred from denying coverage to people with medical problems or charging them more.

The biggest potential beneficiaries of the plan would be small businesses and people buying their own coverage, who now face the highest, most unpredictable rates. Obama would create competitive insurance markets, closely regulated by federal and state officials. The markets would be state-based, as the Senate called for, not national as the House had wanted.

House Speaker Nancy Pelosi, D-Calif., said she looked forward to reviewing the plan and discussing it at the summit. "We must pass comprehensive, affordable health insurance reform, and I am hopeful that Thursday's meeting will help us achieve this goal," she said.

But House Republican Leader John Boehner of Ohio dismissed the proposal, saying, "the president has crippled the credibility of this week's summit by proposing the same massive government takeover of health care based on a partisan bill the American people have already rejected."

Both will be at Thursday's summit, to be held at Blair House, the historic presidential guest quarters across from the White House.